- President’s letter ends speculation as experts react
The Central Bank of Nigeria (CBN) governor Godwin Emefiele is set to become the first governor of the apex bank to serve a second term since Nigeria’s return to democratic rule in 1999.
Already, President Muhammadu Buhari has requested the Senate to confirm the CBN governor for another term of five years.
Buhari’s letter to the upper chamber, dated May 8, 2019, was read by Senate President Bukola Saraki at the end of plenary yesterday.
“In view of the expiration of the first tenure of the current Governor of the Central Bank of Nigeria on June 2, 2019, and pursuant to the provisions of Section 8 (1) and (2) of the Central Bank of Nigeria Act, 2007, I hereby present for confirmation by the Senate Mr Godwin I. Emefiele for reappointment as the Governor of the Central Bank of Nigeria for a final term of five (5) years.
“It is my hope that the Distinguished Senate will consider and confirm the nominee in the usual expeditious manner,” the president said in the letter.
Our correspondent reports that communications from the president are usually read at the beginning of plenary, but because this one came after the commencement of sitting, Saraki had to read it at the end of the session.
Section 8 (1&2) of the CBN Act 2007 states that “The Governor and Deputy-Governors shall be persons of recognized financial experience and shall be appointed by the President subject to confirmation by the Senate on such terms and conditions as may be set out in their respective letters of appointment.
“The Governor and Deputy Governors shall be appointed in the first instance for a term of five years and shall each be eligible for re-appointment for another term not exceeding five years.”
The Lagos born Delta State indigene, a former Group Managing Director of Zenith Bank, was first appointed on June 2, 2014 by then President Goodluck Jonathan to replace Sanusi Lamido Sanusi who ended his tenure under suspension. Many attributed his emergence at the time to the influence of the founder of Zenith Bank Jim Ovia.
Emefiele, had before his banking career, worked as a lecturer in Finance and Insurance in two Nigerian Universities. He holds degrees in Banking and Finance from the University of Nigeria, Nsukka, and is also an alumnus of Stanford University, Harvard and Wharton Graduate Schools of Business.
Why Emefiele got Buhari’s nod
Emefiele had earlier confirmed his re-nomination at the Association of Assets Custodians of Nigeria (AACN) conference in London, yesterday.
Daily Trust learnt that Emefiele was reappointed by the president because of his commitment to funding agricultural activities.
“You know the president believes he did quite a lot in the area of agriculture, particularly rice farming. And you also know that the CBN has been supporting farmers and entrepreneurs through various policies including the Anchor Borrower Programme.
“So the president believes having been a part of this arrangement and knowing the focus of the government, Emefiele should remain so that the feat achieved can be sustained and improved upon,” a source told Daily Trust last night.
Another source said the CBN governor seems to understand the body language of the president when it comes to defending the naira against devaluation. “So he has earned the confidence of the president by toeing this line,” the source added.
However, some believe Emefiele was given the nod to do another five years at the apex bank because of the ‘good relationship’ he enjoys with people close to the president.
Many names have been mentioned as possible replacements to Emefiele before the president’s letter to the Senate. The names included that of Aishah N. Ahmad, a deputy governor at the CBN in charge of Financial System Stability.
Others included a former finance minister and Vice President of Islamic Development Bank (IDB) Mansur Muhtar; the Managing Director/CEO of Asset Management Corporation of Nigeria (AMCON) Ahmed Lawan Kuru; as well as Kingsley Moghalu and Obadiah Mailafia, both former deputy governors at the CBN and presidential candidates in the 2019 elections.
Experts differ on assessment
Experts have reacted differently to the reappointment of Emefiele for a fresh term of five years.
Commenting, Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said Emefiele has performed well and has sustained the vision of the Buhari-led government.
He has also attributed Nigeria’s rising foreign reserves and drop in inflation to the policies of the CBN led by Mr. Emefiele.
According to him, Emefiele has worked hard to stabilize the economy, stability in exchange rate and exit from recession, adding that the Buhari government even campaigned for its second term on the success of the Anchor Borrowers Programme.
Prof. Uwaleke however advised the CBN governor to ensure the country keeps a low interest rate regime environment in partnership with fiscal authorities.
Dr. Bongo Adi, a lecturer at the Lagos Business School, Lagos, said CBN under Emefiele has to reconsider its monetary policy positions.
He said the “CBN governor’s monetary policy hasn’t worked for this economy. Some people, including myself, think that he hasn’t done a wonderful job. So except he has a rebirth in the second tenure, the economy will not be able to generate the level of growth that will account for our population increase.”
Analysts including Mathias Althoff, a money manager at Tundra Fonder AB, said Buhari’s decision to give Emefiele a second term is unlikely to usher in major reforms.
“The likelihood of either the Buhari administration or the central bank under Emefiele doing anything other than what we’ve seen in the past four years is very low,” Bloomberg quoted Althoff as saying.
“The independence of the central bank is, rightfully, questioned. I don’t believe Emefiele is strong enough, nor has he indicated any will to make any major changes to the current foreign-exchange regime.”
